Corning CFO Doesn’t See Yen Much Weaker

Senior Editor

The Japanese yen could remain volatile in the coming months but won’t fall much further from current levels, said Jim Flaws, CFO of glassmaker Corning Inc.

Bloomberg News

Currency symbols for the Yen and U.S. dollar

The yen, which traded around 98 to the dollar on Tuesday, lost almost 18% of its value this year against the dollar, hitting a low of 103.21 in May. The decline against the U.S. dollar has been driven largely by the Japanese government’s policy to pump money into the economy to get consumers spending again.

Earlier this month, Japan’s Liberal Democratic Party, led by Prime Minister Shinzo Abe, won a majority in Japan’s upper house elections. The party now controls both chambers of Japan’s parliament.

Mr. Abe has said he favors a weak yen, but Mr. Flaws told CFO Journal, “It’s not clear to me . . . what more they’re going to be able to do.”

Corning acknowledged in April it had been caught off guard when the yen plunged in value. Corning, which makes glass for LCD flat-screen TVs in Japan, has since started using collar-option hedges, which protect the company from a weakening above 93 yen to the U.S. dollar.

The company also now reports core earnings on a constant yen basis, assuming a 93 yen value. On Tuesday, Corning reported that second-quarter profit rose 35% as sales climbed and expenses fell.

Mr. Flaws said that the company is hedged through next year, but recently took on more contracts earlier this year to hedge roughly one-quarter of the company’s projected 2015 earnings.

Nearly across the board, mid-market executives are hiring new employees, buying new technology solutions, acquiring businesses to reach new markets and preparing IPOs, according to a Deloitte survey of more than 500 mid-market executives. But companies are running up against a number of constraints as they seek to expand, particularly in acquiring and retaining skilled talent.